As the world's two largest developing countries, China and India is not only a major economic power in Asia, but also in the global economy also plays a pivotal role. Economic and trade relations between the two countries on trade and economic cooperation in Asia Pacific, and the whole world economy will have a significant impact. According to Chinese customs statistics, in 2008 the Sino-Indian bilateral trade totaled $ 51.8 billion, 17.8 times that of 2000. According to India, "Financial Express" reported July 27, 2009, Indian Commerce and Industry Minister said that due to weak demand from the United States, while the demand for Chinese products, China has surpassed the United States to become India's largest trading partner.

In the international financial crisis in the context of trade between China and India, although subject to different degrees of impact, but still maintained a relatively strong vitality. China and India are in this round under the shadow of the global financial crisis, the two fastest-growing countries, and these two economies, the development model is very different. 

India seeks to emulate the success of China, hoping for an increasingly large in the manufacturing sector of the labor force to provide employment opportunities. While China is trying to emulate the Indian IT, pharmaceutical industry and other areas of relatively high levels of knowledge to succeed. Sino-Indian economic and trade relations developed rapidly has become a new bright spot in Sino-Indian relations, but also help to improve the region's confidence in coping with the financial crisis struck.

 

Second, the financial crisis on the impact of the Sino-Indian economic and trade cooperation

 

Currently, the world economy is facing a financial crisis and the economic development cycle, double pressure, in this case, although the economy of China and India is still growing, but the growth rate decreased significantly, external financial turmoil, economic development environment deteriorated significantly. Sino-Indian economic and trade cooperation between the main actors in the enterprise, however, under the impact of the financial crisis, consumer confidence declined, their liquidity difficulties, resulting in a large number of business failures, many companies shrink the scale of production. Some projects have been launched forced to shut down, some of the original agreement may be set aside, and Indian economic and trade cooperation under attack. For example, China is the world's largest iron ore demand, India is the second in Australia, Brazil's third largest iron ore in China after the country of origin for 80% of its iron ore exports are sold to China, and occupy its trade with China more than 70%. Economic crisis Chinese steel production fell sharply, despite the global iron ore prices have dropped, but the Chinese enterprises overall sluggish demand for iron ore, iron ore demand in India also showed a downward trend, thereby further increasing trade deficit with China, India, India turn to other commodities exports to China to take anti-dumping policy, the impact of economic and trade relations between the two countries. The economic crisis is the main adverse effects:

(A) India's trade protectionism

Despite the rapid development of Sino-Indian trade, India and China's enterprises to invest in long-term access to goods skeptical and investment review and take frequent anti-dumping measures. Relevant information, India the number of anti-dumping on China after the United States.

After the financial crisis, trade protectionism worldwide upward trend. Although India prides itself on its own domestic demand-driven growth model is, once admission suffered financial crisis is relatively small, or even that the financial crisis to provide the opportunity to catch up with China, because relying on export-driven growth in China subject to greater impact. But the reality is that India has failed in a crisis spared. India's economy also suffered rupee depreciation, the stock market has shrunk, business failures, capital mobility, stress and other problems.

In order to stimulate domestic economic growth, support domestic enterprises to survive, India has taken a series of trade protection measures, particularly against China initiated anti-dumping actions and more. Especially in the January 23, 2009, India announced a ban on imports of toys from China, and although some products to relax the conditions, but its trade protectionism is not self-evident.

(Two) the dispute intensified development model

At present, the international community's development model mainly to the United States as the representative of free-market capitalism, the European Union, represented by the welfare capitalism, as the representative of the Japanese developmental state capitalist model and emerging countries China and India mode. Since the 1990s, the economic problems in Europe and Japan are more favor its development model has been America's free-market capitalism. "American model" or "Washington Consensus", whose purpose is to emphasize free market principles, advocated minimizing the role of government, full liberalization and market-oriented. "China model" especially in maintaining social stability of the active innovation, bold practice, in order to achieve sustained economic growth, social development, the country's peaceful development of a set of ideas, experience and theory. Chinese model emphasizes pragmatism against ideology as the guiding principle; emphasizes co-ordinate domestic and international situations, adhere to self-reliance and opening combination; emphasizes the overall co-ordination of government and market two. "Indian model" Unlike China, the basic idea is to promote democracy and economic liberalization under the system, and gradually relax the traditional government regulation to encourage private enterprises, the development of high-tech industries and services, and to achieve rapid economic development.

Third, the financial crisis, the Sino-Indian economic and trade cooperation measures

(A) mining economies are highly complementary, and deepen economic and trade cooperation

And the "security dilemma" compared to more opportunities to win the economic field. Sino-Indian model of development are different, but highly complementary. Chinese labor force, high efficiency, high efficiency the Indian capital, a combination that will produce "economic efficiency" effect. Future the two sides can focus on strengthening cooperation in the following areas. First, the structure of complementary goods. From the commodity composition, India's merchandise exports to China are still raw materials or low-value-added products, China's exports of goods more diverse and higher value-added, such as heavy machinery. Since both the overall economic development model and the specific differences in level of industrial development, the complementarity of this commodity trade can continue. Two complementary within the same industry. The two countries in similar sectors, such as chemicals, machinery and textiles and other areas of intra-industry trade is also entirely possible. The two can be combined with the development of their own characteristics, and constantly improve their own similar products in different levels of the value chain of comparative advantage, expanding complementarities within the same industry. For example, China and India in the field of textile exports from India competing enable Chinese enterprises to import textile raw materials, and their production and export of garments. Thus, the internal trade between the two countries through the textile industry will be able to compete into new cooperation opportunities. Three complementary areas of IT services. Indian software development, Chinese hardware developed countries to establish joint ventures in the IT field have quite broad prospects.

(Two) encourage enterprises to go out and strengthen mutual investment and cooperation

India has always been wary of China, in many "sensitive" areas for Chinese enterprises to invest in handicapping. After the financial crisis, India respite serious problem of a shortage of capital mobility, the relaxation of foreign investment restrictions in some fields, and encourage enterprises to overseas financing. October 2008, India Securities and Exchange Commission announced the lifting of foreign investment up to 40% of the investment threshold requirement in order to "retain" is rapidly outflow of foreign capital. February 2009, the Indian government said it would relax foreign direct investment in the capital of India, who accounted for 50% of the Indian capital of the joint venture to build a new business is always seen as Indian companies. Under the original legislation, where there are foreign enterprises to establish India to join the new enterprise is still seen as a joint venture. Under the new rules, a majority of all the Indian capital New companies will not be subject to government on the proportion of foreign investment in different sectors of the restrictions. The move is no doubt the Government of India for Chinese enterprises to enter India provides an opportunity to enhance the economic interdependence of bilateral relations is bound to be used as a stabilizer. In addition, the two big companies in the global market is much more competitive strength to enhance and speed up the "going out" pace. The strength of the Indian private sector in the economic life plays an extremely important role, only two Tata and Ambani family business's sales accounted for about 5% of India's GDP. At the same time, Chinese enterprises can also with strong financial resources, through capital injection, mergers and acquisitions and direct investment, etc., to accelerate to enter the international market. The international financial crisis, many large Western company's assets shrink, or even facing bankruptcy, international commodity prices fell sharply than before, as the Chinese and Indian firms to enter the international market provides a rare opportunity.